We've all been 'socially cleansed' by the housing market

When I finally get around to writing the Newspeak dictionary I will be including that fabulous neologism “social cleansing”. We’ve been here before, in October 2010, when Polly Toynbee suggested that the Tories had a “final solution” for the poor because they had the outrageous idea that social housing might be better concentrated outside of highly expensive areas. Now Newham Council in east London has been accused of “social cleansing” because of plans to move 500 families to Stoke-on-Trent.

The crux of the problem is that housing costs are shooting up in the area (partly because of the Olympics) and it makes far more sense to move the (presumably out-of-work) claimants to an area where there is plenty of empty property.

So if that’s social cleansing, how is it different to the process of social cleansing that happens all the time? It’s called the market – every time something goes up in price, some people get priced out, and it’s the same in housing.

Most of us have been "socially cleansed". For the majority of people who use private housing in one form or another, the idea that not being able to live in one’s chosen area is tantamount to the sort of ethnic cleansing seen in the Balkans is a little tasteless.

In the past decade, hundreds of thousands of people have been forced to move out of their desired area – often the neighbourhood where they grew up and in which they have families – because of rising housing costs. (And “social cleansing” as a phenomenon really began in the early 1970s, when housing rules changed from a queue system to one based on need, which broke up the family-based system of housing allocation.)

Much of London is now populated only by the super-rich and the very poor, with the middle class and especially lower middle class completely driven out – which unsurprisingly does not make for a very comfortable mix, as these are the people most likely to act as a bridge between the classes.

And part of the reason they’ve been priced out is housing benefit itself, which inflates prices in desired areas, a problem Kristian Niemietz of the IEA outlined in this interesting paper a year or so back. As he suggests:

The cost explosion in the Housing Benefit (HB) system and the weak incentives to enter the labour market have a common root. HB closely follows local rent levels, so that recipients do not benefit from relocating to less expensive areas. As a result, HB recipients tend to be concentrated in high- rent areas, where they find it especially difficult to replace HB with earned income.

This paper proposes to standardise HB rates, so that recipients begin to make trade-offs between housing and other goods in the same way as low-earners. This offers the potential to cut HB expenditure substantially and improve the relative pay-off from moving into employment.

I cant say whether it’ll work, but it’s certainly worth discussing without hysterical, hyperbolic language being used by people who have a vested political interest in turning London into a middle-class-free zone.